Buying real estate in Istanbul
Istanbul is a city that regularly welcomes newcomers. With its relentless energy, it attracts all types of tourists and expats, from those who stop by for a brief visit to those interested in a more permanent stay. If you are thinking about settling in Istanbul, you may be looking into buying property in the city. This article in our guide explains all the intricacies of real estate purchases in Istanbul.
Why move to Istanbul?
Istanbul stands at the crossroads of Europe and Asia, both geographically and culturally. This unique positioning gifted the city a rich tapestry of cultures, traditions, and histories. Expats are drawn to this blend, which is evident in everything from the city's architecture to its cuisine. Living in Istanbul means experiencing a daily mosaic of Byzantine relics, Ottoman palaces, and modern skyscrapers alongside bustling bazaars and stylish boutiques.
Buying property in Istanbul comes with practical benefits. Purchasing real estate valued over USD 200,000 will give you grounds to apply for a residence permit. Purchasing real estate valued at over USD 400,000 will allow you to apply for Turkish citizenship.
Good to know:
The Turkish government has recently announced plans to increase the minimum real estate value that would qualify you for Turkish citizenship to USD 600,000.
Istanbul is renowned for its vibrant social life and cultural scene. It is home to numerous festivals, art exhibitions, and concerts throughout the year, catering to a diverse array of interests and tastes. The nightlife in areas like Beyoğlu and Kadıköy would be particularly appealing to younger expats.
As Türkiye's economic, cultural, and historic center, Istanbul presents numerous career opportunities, especially in sectors like finance, tourism, education, and tech startups. The city's dynamic economy attracts professionals from around the world, making it an ideal place for career advancement and networking with a global community.
Compared to many other major cities around the world, Istanbul offers a relatively affordable cost of living. Housing, food, and transportation are generally less expensive, allowing expats to enjoy a higher quality of life without the hefty price tag. Additionally, the city offers a range of housing options, from modern apartments in bustling city centers to quieter, more residential areas.
For expat families, Istanbul offers a wide range of international schools, providing high-quality education and various international curricula. This makes the transition for expat children smoother and allows them to continue their education in a familiar language and framework.
Istanbul's culinary scene is a reflection of its cultural diversity. The city offers a wide array of dining options ranging from traditional Turkish cuisine to a variety of international dishes. Expats can indulge in everything from street food like simit and kebabs to fine dining experiences in upscale restaurants.
Istanbul's history is rich and layered, offering a captivating journey through time. From the grandeur of the Hagia Sophia and the Blue Mosque to the ancient walls of Constantinople, the city is a living museum, enticing those with an interest in history and archaeology.
Finally, rent prices in Istanbul continue to rise. If you plan to settle in the city long-term, paying the constantly increasing rent may become a substantial burden on your budget.
Understanding Istanbul's real estate market
Istanbul's real estate market continues to be a dynamic and evolving landscape, reflecting the city's position as a bridge between Europe and Asia. In recent years, the market has seen a mix of trends influenced by various economic and socio-political factors, attracting a diverse range of investors, including many expatriates.
Current trends
In Istanbul, which is not only Türkiye's largest city but also its most premium housing market, average property prices witnessed a dramatic increase of 66.7% over the year leading up to October 2023, reaching 44,387 Turkish Lira (approximately USD 1,475) per square meter. However, when making adjustments for inflation, the rise in house prices amounted to a more modest 3.3%.
Following the beginning of the Russo-Ukrainian war in February 2022, Istanbul (as well as many other major cities in Türkiye) has seen a large influx of immigrants from both countries, which has significantly affected the prices as well as the availability of property in the city. In fact, in 2022, Russian nationals bought a record number of homes in Türkiye - over 16,000. As of 2023, the real estate rush has somewhat slowed down, and in the 11 months of 2023, Türkiye experienced a significant decline in home purchases by foreign buyers, dropping by 46.1%.
Good to know:
It's important to keep in mind that Istanbul's market is prone to dynamic changes, and it's essential that you keep up to date with the latest trends. Demand for property, prices as well as related regulations change frequently, and new laws tend to come into effect very quickly.
Another notable trend in Istanbul's property market is the increasing demand for modern and luxury housing. This demand is driven largely by both local affluent buyers and foreign investors seeking high-end amenities and a cosmopolitan lifestyle. Consequently, there has been a significant rise in the construction of luxury apartments and gated communities, particularly on the European side of the city.
Another trend is the growing interest in historic properties, especially in areas like Galata and Cihangir, where old, characterful buildings are being renovated to meet modern living standards. This reflects a desire among some expats and locals alike for properties that combine historical charm with contemporary comforts.
The market is also experiencing an influx of foreign investors, spurred by the Turkish government's policies, such as the Citizenship by Investment program, which allows investors to obtain Turkish citizenship through substantial real estate investment — as we've mentioned earlier.
Popular areas for property investment in Istanbul
Certain neighborhoods in Istanbul have become particularly popular among expats for property investment. On the European side, areas like Beşiktaş, Levent, and Nişantaşı are favored for their central location, vibrant social life, and proximity to international schools and business centers. These areas are known for their high-end apartments and villas, offering luxurious living spaces.
On the Asian side, neighborhoods like Kadıköy and Üsküdar are attracting expats who prefer a more laid-back lifestyle. These areas offer a mix of modern and traditional housing options, with the added appeal of stunning Bosphorus views and a strong sense of community.
Property prices in Istanbul
As of 2024, the average price of real estate per square meter in Istanbul is estimated at USD 1,432 — to compare, the average cost per square meter in 2020 was USD $550.
While property prices across the city continue to be on the rise, buyers will also naturally notice substantial differences in price depending on the type of accommodation and neighborhood.
In Istanbul, the most expensive property types are typically luxury apartments in high-rise buildings and standalone villas. These properties often come with premium amenities like security, swimming pools, fitness centers, and, sometimes, spectacular views of the Bosphorus.
Certain areas in Istanbul are particularly renowned for their high-end properties. Neighborhoods like Bebek, Nişantaşı, Etiler, and certain parts of the Bosphorus shoreline are known for their luxurious homes. These areas are highly sought after for their exclusivity, scenic views, and proximity to high-end shopping, dining, and cultural amenities.
Areas surrounding central business districts, such as Levent and Maslak, also command high property prices. These neighborhoods are popular among professionals and expatriates who prefer to live close to their workplace and enjoy the conveniences of urban living.
Istanbul's rich history is reflected in its real estate market, with historical properties in areas like Sultanahmet and Galata often being highly prized. While these properties can command high prices, they also offer a unique living experience steeped in the city's historical and cultural heritage.
Good to know:
The Turkish economy, characterized by periods of rapid growth and volatility, has a significant impact on property prices in Istanbul. The fluctuation in the value of the Turkish Lira can affect property prices, especially for foreign investors dealing in stronger currencies. This has sometimes resulted in more favorable prices for international buyers, making Istanbul's property market an attractive investment opportunity.
How to buy property in Istanbul as an expat
Buying property in Istanbul as an expat involves a series of steps, from initial research to finalizing the purchase.
- Start by researching the Istanbul real estate market. Understand the trends, property prices in different neighborhoods, and the types of properties available. Websites like Sahibinden and Hepsiemlak can come in very handy here. They can give you a good overview of the market and help you evaluate your requirements and budget against the available options.
- Verify if there are any restrictions on foreigners buying property in Türkiye. Some areas may have restrictions due to military or cultural significance. Moreover, certain neighborhoods in Istanbul may be considered to have an already high percentage of foreign residents and thus be unavailable for new residency applications — this is important if you plan to use your property purchase as grounds for residency.
- Consider hiring a local real estate agent who understands the needs of expats and can navigate the Istanbul property market. It is also a good idea to engage a lawyer who specializes in Turkish real estate law to help with legal procedures and ensure the property has no legal encumbrances.
- Visit multiple properties to get a sense of what your budget buys in different areas. Conduct thorough inspections of the properties to check for structural issues, legal compliance, and other potential problems. It may be best to have your real estate legal advisor or construction professional accompany you on such visits to help you get a proper understanding of the property.
- Once you find a property you like, make an offer through your agent. Be prepared to negotiate on the price. Once the offer is accepted, a preliminary agreement is typically drawn up, outlining the terms of the sale.
Deeds, permits, and legal procedures for buying property in Istanbul
One of the key documents proving your property purchase is known as Tapu (title deed). It is crucial to verify that this document is accurate and legally valid. This includes checking the property's registered owner, its exact boundaries, and size.
Ensure there are no existing liens, mortgages, or encumbrances against the property. Outstanding debts or legal claims can affect your ownership rights.
Check the local zoning laws and land-use regulations to ensure the property's compliance and to understand any future development plans that might affect the property.
Investigate the history of the property to uncover any potential issues that may not be immediately apparent, such as disputes over ownership or historical preservation restrictions.
In some cases, especially in areas close to military zones, foreign nationals must obtain military clearance before purchasing property. This process involves verifying that the property is not located in a restricted military zone.
While not always a prerequisite for property purchases, having a Turkish residence permit can sometimes facilitate the process.
If you plan to make significant changes or renovations to the property, check if the existing construction permits align with your plans. If not, you may need to apply for new permits.
Especially for properties in coastal areas or near natural reserves, ensure compliance with environmental regulations to avoid future legal issues.
Additional documentation may also be required, so make sure to consider the following:
- Obtain an official property valuation report. This is mandatory for foreigners buying property in Türkiye and helps determine the fair market value of the property.
- If you cannot be present for all procedures, you might need to grant power of attorney to a trusted individual or your lawyer to act on your behalf.
- Understand the insurance requirements, including earthquake insurance, which is mandatory for all properties in Türkiye.
- Familiarize yourself with property taxes in Türkiye. There are one-time taxes during the purchase and annual property taxes.
Important:
In 2023, Türkiye introduced a new law that requires homeowners to get a special permit from the Ministry of Tourism if they want to rent out their apartments for short-term – for instance, on websites such as Airbnb. Moreover, those owning properties in gated communities will now need to make a communal decision on whether apartments in the complex will be available for short-term rent, which will affect property sales tax. This is something to take into account if you plan to buy real estate in the city with the purpose of renting it out. The new law is also forecast to affect overall real estate prices in the country.
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